tv Street Signs CNBC September 1, 2016 4:00am-5:01am EDT
welcome to "street signs." i'm carolyn roth. >> and i'm nancy hungerford. these are your heinz. china pmi data surprise toz the upside coming out of contraction. a drink to that. toast to a solid report card as the french spirit makers eyes a turn around in china. total political crap. apple slams uds tax decision saying the country is being picked on.
the battle over the bill. donald trump clashes with mexican president enrique about who would fund the border wall, but made his stance clear after returning to arizona. >> mexico will pay for the wall. 100%. they don't know it yet, but they're going to pay for the wall. >> good morning and welcome to "street signs." happy september. the sleepy summer days are drawing to a close as markets get back to business here. we're going to get you straight up to speed with data breaking from the euro zone. this is the august market manufacturing pmi.
final reading for the euro zone coming in at 51.7. tad shy of douj looking for 51.8, but overall this level holding in expansion territory. that is good news in the wake of brexit. a lot of people have been surprised how steady the pmi figures have been. we should mention before we got underway here, german pmi did show signs of slowing down, but healeding steady as well. italy, however, that manufacturing pmi did hit below 50. that is in contraction territory for the first time since january 2015. overall looking at the euro slightly weaker. off .20%. a lot of the dollar trafd is focused on the big nonform payrolls report. >> let's see how european markets are doing roughly one hour into the trading session. we're just off the session highs. closed out the month of august with respectable gains by the
dax. around 1.5 for ftse. stock 600 down 0.4%. a modestly positive start to the month of sent. let's have a look at the sis one by one. the xetra dax up 0.4%. the ftse 100 higher by half a percent. in part because basic resources are bouncing back from the recent weakness. oil price haves rebounded in the asian trading session as the dollar dipped a little bit. the cac higher by 0.7%. talk about frerngs that market in a little bit. overall the markets lifted by the chinese pmi. we'll get to that in ale few seconds as well. sector wise still seeing banks outperforming. why this continued chatter about the merger between deutsche bank and commerzbank even though yesterday the ceo said this is not an option. that continues to inspire investors to buy into the sector. basic resources seeing rebound activity, 1.3% to the upside
here. the only under performer sector wise is telecom off 0.1%. largely a defensive play. also underperforming. now chinese manufacturing sector did rise above the 50 line. beating expectations in the month after august. let's get to shri. see how this affected the asian session. good morning. >> reporter: hi, there. i wouldn't get too carried away. it did look impressive face value, but you dig a little bit deeper, there are stresses in the labor market. stresses when you consider the speed bumps along the road in this transition from old economy manufacturing towards new economy and consumer led growth. also speed bumps still and stresses on the external front. i would add this is one off on a short lived operation in the data. anyway, we will see. let's take a look at these markets. the mainland chinese equities markets are typically agnostic
when you look at the data. the big drag today was the 3% decline. the exporters respectively feeling the heat from that one. broadly, there's not great deal of conviction in these markets until we get clarity on the payroll. what that means for the fed, what that means for the dollar and also bond yields as well. had a pretty goods run up the last month or so. em asia has been in favor a. negative and zero rate environment shlgts this is where you can find the yield. does that party continue? it really depends on the dollar. and depends on treasury yields as well. what stance the fed takes, ultimately. ladies, back to you now. >> yes, a lot of anticipation. data again tomorrow. before that a lot of information out today especially on productivity. meanwhile, volatility has
continued to fall throughout the summer. what is the outlook for stocks in september. dock nick chew has been taking a look at investors get that back to school feeling. >> after what's been an pretty uneventful surge of trading outside of the brexit vote in june, some traders are anticipating a volatile september as many get back from vacations and get back to work as their kids head back to school. now, in the post financial crisis area the last six years, stock haves seen slightly more volatility in other months. average it ends up being a flat market. since 2010, the nasdaq, s&p and dow have gained a percent or less during september. it's only been a 50/50 slit whether the month was positive. now for the rest of the year, data shows the last 20 years during the month of september through december the trends have been more positive. the s&p has gained over 4% on average during that time span. been a positive result 80% of
the time. health care stocks among the better performers. meanwhile, energy stock haves been the lagging performers. now, remember, we're talking average numbers here. time frames do matter. september, remember, filled with potential market moving catalysts like jobs data in the u.s., a federal reserve interest rate meeting, a presidential debate later on in the month and opec meets as well which could lead to action in the oil markets. when it comes to september the average numbers may suggest it could be an uneventful month, but that could all change in all new york minute. i'm dominic chew, cnbc business news, new york. >> joining us now for another prove of what to expect, nick nelson head of european strategy is with us around the set here. pleasure to have you with us this morning. hard to believe it's september 1 already, but investors kind of clearing the summer cobwebs away here. what should we be bracing for. dominic was running us through, september is known to be a
volatile month. >> sure, it can be. people coming back from vacations. vol youms picking up in markets. we think it will be december when they actually go and raise rates, but preparing markets for that move for the second part o this year. equities haed a pretty good run. had a pretty good run in europe over the summer period despite is vote to leave. as you were just seeing there the pmis have held up okay so far. the question is the as we get more information on the uk economy somehow that impacting. is it rippling through to the rest of europe. are there bigger things to worry about. people focussing on that in september definitely. >> so far the pmis confirming the data has been fairy resilient in europe given the forecast we saw leading up to the brexit vote. next week taking a closer look at the ecb. do you expect mario draghi to announce chains, perhaps on the bond purchases.
>> we think at some point there's going to be some qe. maybe technicalities about what particular bonds they can buy to extend the remitters. we know there's $13 trillion of global bonds that are negative yields right now. so i think they might adjust in the technical exposure. we think they might wait until september before you see a big announcement in terms of extensions. >> i was looking at data this morning. it was worrying for europe. money flowed out of eu equity funds for more than six months. that's a record. what point would that actually stop and what would the catalyst be for that. >> not a popular place to be. people have been avoiding it. u.s. and emerging markets and debt markets have done better. i think in europe the key factor people are looking for what it hasn't had in contrast with the u.s. in the last few years is earnings growth. you've had five years of zero earnings growth. for equity investors, that's a disaster. essentially what we're looking for is a turn in that.
interestingly in aulg for the first time in 15 months you saw more upgrades than downgrades. you may be starting to see an inflection point kol accident through in terms of earnings. if we saw that pick up in the second half of the year, that would attract inflows to european equities. >> you're telling you're investors to wait for growth. both are rallying, for you as you know as a european equity investor or your clients mainly european equity investors, what are you telling them? steer clear of european stocks all together? you can't do that. >> we're saying be selective. some defenses that have lagged behind so some utilities for example in this low bond world should be doing better, we think. there's also tell co-s, health care. consumer same ls are fully valued to us in terms of defens defenses. construction, for example if we get a fiscal boost coming through in europe. you have to be selective.
i don't think you steer clear of european equities. there is value there. >> there is also value in emerging market exposed stocks. we'll get to that in a second. nick nelson is going to stick around. do send your e-mails in to the show. address is email@example.com. find us on twitter always. tweet us directly. we both have twitter desks hope. get in touch early. we've got about 50 minutes left. we want to hear from you. still to come, rickard drinks up as the company reports full year under lying profit growth. break down those profit results after the break. people get anxious and my office gets flooded with calls. so many things can go wrong. it's my worst nightmare. every second that power is out, my city's at risk.
a leading european business lobby has said china could face a backlash if it doesn't open itself up more quickly to foreign vice president. th investment. this comes before the summit. taking a look at chinese preparation for hosting the big event. >> reporter: empty highways, police barricades, sewer grades completely sealed off. not the first country to host the g 20, but holding the event like no one has done before. taking place in the tourist town. 9 million people. one of china's weltiest cities. home to some of the nation's most successful companies like alibaba. none of that is as important as putting on a good show for u.s. leaders, like president obama, who are coming here to discuss the global economy. so business is at a stand still. >> hung joe has been a ghost
town. normally bustling with residents and tourists. all the shops have been closed down: ordered by the authorities to stay closed until the end of the g 20. >> the city declare add holiday for the week as a way to ease potential crowds. many delivery trucks and supplies have been blocked from coming in. factories a idle to ensure blue skies and travel agencies have been instructed to restrict group tours to the main attractions like the west lake as police and military cord off major venues and step up id checks along main roads. the extreme security extends to other cities like shanghai. according to other national media, such auz reuters, the city is barring budget hotels from excepting travelers from certain muslim nations like iraq or pakistan.
>> reporter: the government has called for volunteers brandishing red arm bands. necessary to ensure safe or sweet g 20. yet the new lock down is leaving some residents feeling bitter. the police stopped us from speaking to average people on camera, but called the clamp down inconvenient and inhumane. a facelift to maintain the communist party's face. for now, those here with only wait it out. and city makes last minute touches for picture perfect moment showcasing this rising power. eunice yoon, cnbc. >> that's idle factories for a week or so. >> we've seen this before, during the olympics. let's get back to nick nelson head of europe strategy at u.s. see if he sees blue skies ahead for the emerging market focus stocks. you're a stat girategist. >> you look at european
companies listed here in europe that have high emerging market exposure, they've underperformed for almost five years. around about q1, 2 they started the turn. around may we noticed the earnings meant for these guys having been negative for three years just turned positive. there's been a swing here. partly because of effects and emerging market currency has stabilized. up 5% to date. partly because the activity as you saw is chinese pmi numbers today. stabilizing and brazil and russia are coming out of recession. it's getting better. emerging market equities and debt have recognize third-degree and we see a very sharp moves in those asits. what we're seaing if you look at europe, there's maybe european listed stocks that have up to half or two-thirds of their exposure from emerging markets. >> such as? >> we have a few we listed high neck and fks. telefonica, autos.
ewouldn't focus on one sector. look across the market as a whole and pick high yield exposed names in the sectors. >> what happens once the fed hikes rates again? are you sure we're not going to see another temper tantrum. people said the tantrum, that's a thing of the past. how do you know that once you're exposed to stocks. >> if it's a gradual move, we think they're going to december. in that world, it's a slow tightening process of rates in the u.s. we don't think the dollar necessarily strengthens dramatically. some of the fundamentals, they're not great, but you know they're getting better. the economies are improving. coming out of recessions. commodity prices are higher than they were in february. the fundamentals are better. that will give you some support. yes, if people think the five rate hikes in the next five or six months. >> fears reversal in the
dividend paying stocks in the u.s. particularly utilities last month. the worst performing sector among the s&p 500. yet you like utilities right here in europe. why. >> it's a good question. utilities in europe have lagged in the last month, but what we would argue is they've got massive debt. pretty much leveraged sector. they will benefit and are benefitting from the bond buying program which is of course pushing down corporate credit yields and making it cheaper to refinance. if you look at utilities or telcos. potentially a very big boost to earnings. we would argue they're a beneficiary of lower government bond yields. and ecb bond buying program. >> you mentioned telcos the other factor everyone is watching here the consolidation push. how will this shape the sector. >> we had a big excitement initially over consolidation. the deals broke. got investors pessimistic.
longer term trend consolidation. also volume usage. if you look at what european spend on moibl compared to u.s. or asia it's almost half. definitely growth in that area. >> hard to believe it's half. i believe i pay plenty on my data. way too much. >> pleasure to have you. that's nick nelson. head of european strategy at ubs. shifting now to global auto sector now looking at mazda recalling 2.3 million cars globally due to issues with diesel engines. japanese auto maker set to recall around 390,000 cars in japan to fix an issue with their rear gates. meantime the collapse of south korea ships has rocked the global trade market. rehabilitation proceedings could start as early as this week, according to south korean judge. a court decision would allow legal actions to prvnt the
seizing of ships, however a report suggests ten vessels have been held at a chinese port. ryan air shares falling 1% in yesterday's trading session after the low cost carrier slashed customer forecast. the airline says it expects to fly five million fewer passengers to and from the uk in 2017 than it previously forecasted. you see them recovering some losses. up now almost 1%. shares of commerzbank are still leading higher. reported deutsche bank had considered merger with the bank. deutsche bank ceo poured water on the rumor yet suggested the banking sector should seek for mergers. in the meantime today, up grated stock to outperform and raising the price target by 9%. that's a big lift, by 9% to 7.67
euros. saying cost with european peers it is not clear commerzbank has a cost problem and the broker does not believe the cost focus restructuring will be easy and will be expensive, but the early morninger fantasies, they go on and on. >> short lived rumor, that one. meanwhile, exploring areas of collaboration with largest operator: french telecom giant did not elaborate on what could involve. negotiations could conclude within a few months. orange had entered talks to buy stake in mci which the company refused to confirm. this as sales to china fell less than anticipated. sales in top u.s. market rose by 4%. the french spirits maker said figures in china were expected to pick up further forecasting
profits. let's devil deep delve deeper i going into the numbers there's a lot of focus on u.s. top market. we're seeing performance and restructuring. are you happy with where pernod ricard is. >> not 100%. i think they're struggling with the u.s. seen slightly better performance. they're in a difficult position. brands like absolute which should be the real growth driver have been struggling a bit. not quite value enough to be an every day purchase, but not quite craft or premium enough to satisfy real connoisseurs either. . research into the china market. we expect it to pick up reasonably well in the next few years. you're starting now to see a little bit of an end to anti-extrav good sense. you're seeing more personal consumption and still a lot of
growth potential there. finding interesting things like the fact western spirits are so expensive in china a lot of people buying them when they travel abroad or buying them in travel retail. actually the figures aren't always picked up in china itself. >> and investors like in the news today saw the stock tick higher. anything to be overly excited about when you look at the sales volume regionally still taking a dip in americas and here in europe. >> i still think it's a tough time at the moment. a lot of the bigger merging markets have been struggling. that's bound to have an impact. i think they're industrial trying to deal with craft. i think they are in a better position to do that. they are in quite a good position. result this is year don't necessarily show that. i would expect them to be more positive next year. >> i want the pick up on craft. that's where they've been aboutiabou active. they've always said they don't
want to be engaged in big scale mna and targeted mma. do you think that will remain the case or to revive growth and profits they will have to go down the avenue of big scale mna at some point. >> not necessarily h. the markets are a lot more fragmented. developing smaller boutique brands and building them up. i'm not sure spending a lot of money like they did with absolute a decade ago is necessary the way forward. the landscape has changed now for big companies. >> it's a curious thing with the craft acquisitions. the whole idea of a big colombia rat doesn't look cachet with consumer. >> the person on the street doesn't know. small minority who may not buy because of that and they may know, but still a niche number. >> i think my vodka days are
over. the absolute -- i mean, as you said, it's being sandwiched. it's not cool enough, not expensive enough. i wouldn't know. >> i was doing a rome of duty free. what are all these brands? it's astonishing how many are out there. which does raise the issue what is the strategy with absolute. will they will able to recover make up for the high price they paid. >> they're trying to bring out brand extensions. more craft and more interesting. trying to bring it into craft in that way. i think it's very, very difficult. it's a big brantdd. there's no avoiding that. >> global drinks analyst. we're going to go for a wick break, but check out world markets live. our blog which runs throughout the european trading day. we'll be back in two: don't go away.
good morning and welcome back to "street signs." i'm nancy hungerford. >> i'm carolyn roth. these are your headlines, basic resources surprises to the upside coming out of contraction. and drink to that. pernod ricard toasts to a solid report card as the french spirit makers eyes a turn around in china. total political crap. apple ceo tim cook slams the eu tax decision telling the irish the country is being picked on. the battle over the bill. donald trump clashes with mexican president enrique pena knee toe. made his stance clear on returning to arizona. >> mexico will pay for the wall.
100%. they don't know it yet, but they're going to pay for. let's get straight to economic data. we have the latest pmi figure coming in at a 53.3. revised number. this is the highest number since october 2015. keep in mind the forecast was for a print sub 50. we've got a much more stronger than expected number. this is in part because of the low level of tv sterling helped the economy. so we're seeing sterling dollar
really jump on the back of this 1.3212. up by 0.6 on the day now. this is quite a big surprise. a lot of people thought we're still going to feel the after effect of the brexit. concerns of what's going to happen to the economy. this is very good news. >> even though we are two years from the actual separation the negotiations, the share uncertainty many were worried would weigh on manufacturing spend. they hasn't been the case. the retail data on the consumer slugging off the brexit effect so far. another piece of data showing the economy resilient. look at the move in sterling now. up .60%. >> on the other hand if you have a weak currency, that's going to lead to higher inflammation. is that good or bad? blessing or curse. >> does it tie the hands of the boe. they will certainly be watching
the inflation effects. mark carney hinlted that already on the previous meeting. >> you can see on the screen input cost rising at the fastest rate in five years. when will that become a problem to manufacturers as the input cost rise tremendously. for now, this is good news. >> it is indeed. it will way weigh into the central banks view. this is coming at a time leaders are just getting back to work on what the brexit negotiations will look like. been a big factor in the ftse 100 comeback. that index has gained around 7% since the brexit vote. that has come to the surprise of many who were warning going into the referendum vote. there you have it. the ftse gaining up higher. the real move reacting to the data has been in sterling. we just saw there. let's give you a check on u.s. markets set to hope. we did see some weakness on the session yesterday. remember, it was the last trading day of the month.
dow and s&p closing in negative territory. breaking six and five month winning streaks. so far the s&p called modestly higher. range of 6 points. dow jones called higher 54 points. nasdaq called higher by 18. a lot of key data points in focus today. initial jobless claims will be the big one. also pay attention to the productivity figures. when we heard stanley fischer speaking to cnbc, he made a big point to say it's the productivity we're watching. the nonfarms are strong, but productivity continues to be a puzzle there. meanwhile give you a check on european markets one by one. first trading day of september. we say good-bye to the sleepy summer season. not so sleepy you might argue this summer. ftse 100 higher .30%. xetra dax holding higher .40%.
ftse mib and french cac all stronger. let's give you a check on the effects curve here. showing you a picture of the strike in sterling. the euro dollar off just slightly by the green back. the greenback making gains against the yen. seen a little reversal here after dollar weak neness overni. higher now by 0.14%. sterling higher. that will be a focus this morning. >> still a long way to go to 1 .40 handle there. got breaking news for you. the russian energy minister novak says oil prices at $50 are normal. that's according to the news agency. russia may look into an output freeze if the price falls. bullish comments for oil. whether that output freeze happens, we'll see.
quick look. we saw gilds lose on the manufacturing data out of the uk. see the ten-year german yield. t has joinsed under the desk. let's quick things off with gilds for a second. do you still want to be a buyer of gilds on the back of boe action and speculation that more is to come or do you really want to focus on the better than expected data. >> we've been in the market for a while. the market reaction to the failed gild buyback led to performance as we could have hoped for on the back of bank of england interventions, but i would put the manufacturing numbers into a bit of context as you pointed out yourself, it is the sec tar of the economy that's going to benefit the most from weaker sterling and in terms of the importance of the
uk economy, i think the certifies pmi and construction pmi later this week will probably move more in focus than this manufacturing number. >> let's not get carried away then. want to talk about treasuries. august has been a poor month. the ten-year yield was up. i expectations of a rate hike. is bond bubble, is it slowly, but surely bursting? >> i guess that's how you define the bond bubble. the u.s. market is easiest to make the argument and call into question of whether we can sustain valuations. at the same time the u.s. market is the only market that offers sufficiently high number of bonds that still have positive yields. a third of all government bonds still trade on the negative yield handle. if you are going to invest, the u.s. probably remains a reasonably attractive market unless the fed starts hiking
faster than what the market is currently pricing. >> even if you don't think there's a bubble ready to burst wharks do you make of comments when he says the market is broken here because of central bank distortion. is this going to be a continued problem for investors? >> yes coming to terms with valuations is a problem investors will always have to deal with, look at the bond market, when do we expect to start hiking rates? not before we manage to close the output gap. when would we have managed to close the output gap? five years time. minus 50 for the next five years, what's fair value for bonds? the talk about bond is difficult when you've got central banks anchors the front end and intervening in the back end. >> you've given us a chart. looking at the average rate of returns. if we can pull that up and take a closer look.
you do make the point it's better to be invested and overall cash will perform. >> that was typical summer exercises that you have time for in august. i kind of asked myself what would a bond market look like. we reversed history. 31 of july and all interest rate ifs r that matter. look v work out what total rates would look like in that environment. surprising result depending on the market, they didn't look all that bad. that's because we tend to underestimate that a large chunk of the returns we see in the fixed income market, comes from the word income. the price returns historically have been all trumped by the income over time. and that's what provides the protection against the selloff. >> not about summer exercise. >> i'm glad someone is doing that in the summer days. thank you for joining us.
global head of rates research at bank of america merrill lynch. meanwhile developments in brazil. protesters taking to the streets of rio to demonstrate against the swearing in of michelle temor of president. crowds chanted out temor. officially announced after senate voted to remove dilma rousseff in a much anticipated impeachment brought an end to left party's 13 year rule. spain rajoy has failed in bid to perform new government. ninth month of political stalemate after general elections in december and january ended without a decisive result. rajoy now has until the end of october to achieve a parliamentary majority and avoid a third general election before year end. emmanuel macron has more
voter support ahead of next year's election. according to the polls, an investment banker who is yet to declare candidacy has the support of a third of the electorate. that's more than the number willing to back hollande. >> we were at the university, the organization of business groups in france, and the organizer said i'm still trying to get him to come, but i think given difficulties having just resigned from the government, initially he was meant to be the spokesperson there. obviously provide some hurdles. we will hope to speak to him in the near future. i should say when we are there, it was the big thing everyone was talking about. the news of his resignation broke as the conference was getting underway. i spoke to some business leaders on the sidelines. slooes he's been in the private sector.
former investment banker. they feel as though he's one of >> don't they usually frown upon bankers to become politicians. >> look at what is going on in the united states. even the middle class white workers are saying we want the wealthy businessman fighting for us. you're seeing the shift. other interesting factor someone seen as a front-runner. people like his experience, but what macron. >> just hours after meeting with mexico president enrique pena nieto, donald trump reaffirmed hard line stance of immigration. speaking in phoenix arizona, maintained he planned to build a wall on america's southern border. >> and mexico will pay for the
wall. 100%. they don't know it yet, but they're going to pay for the wall. >> joining us now is nbc tracie potts who is standing by in washington. good morning, tracey. i must say hardly anything surprises in this campaign race, but i was shocked seeing that because when i went to bed i was looking at donald trump and the mexican president almost having a kuma buyia moment. referred to them as friends at one stage and hours later get this why arizona saying yes, mexico will pay for the wall. what happens next. >> reporter: what happens next is we take a look to see whether or not this resinates with the voters. just a few hours earlier he was standing in mexico saying we didn't really discuss who was
going to pay for the wall. and interestingly after that, the mexican president's office came out with a statement saying no, at the very beginning of the meeting, president pena nieto made it clear they are not paying for a wall. it's not negotiable and they described some of trump's policies as threatening to mexico. not quite the moment we saw when you take a look at the reaction from the mexican government after the meeting and last night in arizona, donald trump lays out this 10 point plan for immigration starting with the, insisting again that mexico is going to pay for it after he said he just had a conversation with the president and never brought it up. >> tracey, thank you so much for bringing us that. another interesting day, no doubt. we'll see how hillary clinton has to respond on the other side as well. >> she's under pressure to come out and respond. >> louisa is absent. she's hopped over to berlin. lieu wee see, what's going on.
>> reporter: always a plethora of announcements here. not going to be different this year. sony a big one. talking to the ceo later today. i'll leave you with a thought. i was teasing and playing with a cat in canada here in berlin. how did i manage to do that? stay tuned, i'll tell you after the break.
days after being slapped with a 13 billion euro tax bill from the eu, apple ceo tim cook has gone on the offensive. speaking to the irish independent said quote, no one did anything wrong here and ireland is being picked on. he claims competition investor just picked number from i don't know where. samsung was the first to
launch latest gadget in berlin. unveiled a new smart watch. had an unexpected update from rival apple. delivery concerns for the new galaxy note seven. korea down little more than 2%. >> la nova was one of the fist big companies to show off big device in berlin. lenovo. launched a new tablet called the yoga book. touch screen keyboard. joins us from berlin to tell us more. you have cats, pets behind you and a yoga book. tell us more. >> reporter: i know. i'll tell you about the cats in a second. playing with a cat in canada just a second ago. with regards to the yoga book, everything is innovative here. everything is the newest model. a lot of these companies are looking at all things bendable. including for example, lg.
looking at the banana phone. something more bendable or bending. you have all kinds of gadgets going in this arena. when it comes to leno voe hits. it's a vie knechinese company. their market is the pc market. they hold more than 20% market share there. when it comes to smartphone market, recently bought motorola ailing and set unit at the time. that's the one they've been struggling to get to terms with. when it comes to invasion from leno voe, there's a lot going on. why focus on the yoga book. that was one question that asked the ceo, asked him, why are you focussing on the tablet market. given it seems to be an industry that is in remission. >> from one side we see the tablet shrinking which is true. we also see pc shrinking. even though when we look at the last quarter, i think the
negative growth is slowing down, but we also see segments that are growing like the touchable, like gaming, but it's a category i think will be something when we look at the worldwide market, in the range of 20-something million with a big growth, 80% growth compared to last year. when you combine the pc, market is almost flat, even with the small positive growth. >> here as well writing up all of a sudden kinds of good stuff for our online tech people. the people interested in tech so head online and check it out there. what do you make of the invasion we're seeing at the moment yards to the wearable gadget, be it benty or not. >> we see companies experiencing with form factors.
samsung stylish watch. something that looks good when you wear it. that's the direction moving with smart watches. talking about bendable frames that could wrap around your wrist. all sorts of things going on and trying to see what sticks. >> you were at the samsung press conference last night. launching another wearable device. the watch. is it that much different. >> there's small upgrades. added new senses to it. few new features with the operating system to give you more apps, few more functionality with the watch. it's a small upgrade and smart watch market is still an experimentation phase. analysts don't know whether this market is going to take off. we saw shipments of smart watching decline in the second quarter. companies are trying to figure out what works. samsung is behind app and will
trying to catch up. >> behind when it comes to investors today. reports of exploding batteries we'll. >> the note seven. we don't know the exact details of what is causing the issues in the battery. it's unclear what's going to take it to resolve. will it push consumers over to p apple. i'm fascinating with the changes in the health arena as well. talking to the cofounder of fitbit. highly anticipating two new twices as well t. screens are getting bigger. they're becoming slimmer, but the screens are bigger to work more with your smartphone. >> want to improve the functionality of the devices. show you messages and phone calls as well as being able to give you health and fitness data. that's where we see the trend in fitness tracker arena there.
>> want to mention as well, right behind us here company called pet cube. invasion in the nation is all i can say. it's a little box. you go over and can log in by your app and the box is at home. you have pets, then you can play with your pet at home while you're not home. i was playing with cat in canada. a shelter in canada with a laser beam. >> that's it. it's the smart home. that's where we're all moving. smart video cameras. robots you can control with your smartphone even over in the u.s. or other country. >> it's phenomenal. you can dish out little biscuits and treats for your pet when you're not home. it just continues. sony coming up. 2:00 cet this afternoon. speaking to the man himself about what's going on with that company. it's been a testing year for them too. >> carolyn, nancy, back to you. >> thank you so much for that. i think i do need that cat
gadget though. >> maybe you can use it so have a virtual cat or dog so you don't have to deal with maintenance. >> i want the real cat. i'm a cat person. >> i'm a dog person. >> meantime, hays is trading lower. the recruitment firm reported 13% operating profit growth on the year. yet struck a cautious tone warning brexit had increased uncertainty and shaken confidence. shares off a little more than 4%. meanwhile, elekta is trading higher. the swedish radiation therapy maker said demand from emerging markets specifically in china helped propel sales. stock higher almost 3%. was a challenging start to the year for global hedge funds. reporting managers saw a combined $34 billion worth of net outflows. that's a big figure. jim joins us onset.
big outfloi flows. credit and equity took the brunt of the hit. most of the hits are concentrated in the second quarter. those that performed better tended to be around commodities quite popular. macro strategies saw the first quarter, little net outflows in second quarter. >> why are we seeing such extreme outflows. pure under performance or cost structure too high. >> i think you zoned in on the two most pressing issues for investors. fees has been in question not just in hedge funds, but the broader asset management sfri. do people really need to pay such high fees these days. >> is it still 220. >> that's is the standard still. something that could possibly really have to come into review. actually seen really interesting ideas on vp in recent weeks. we had daniel god fry the former ceo saying he's going to be paying out over seven years
because he thinks that's the amount of team people should hold shares. five years. much more aligned between investors and his staff when he started t starts his new fund next year. we see cutting out bonuses entirely. fee is a big issue at the moment. >> this will continue. it's part of the reason we've seen some hedge funds close doors. we did hear 2015 was the worst since the financial crisis. is this something you expect to continue. one other thing we heard there are too many trying to play the game. >> in the first half of this year, we saw the same thing. net closers and yes, it is anticipated to continue. the president of blackstone said he anticipates hedge fund will fall about 25% this year. we only saw a 1% fall in the first half. so there's a lot of pain to come it seems. inevitable consequence of falling um is closure of more
funds. >> you mentioned perform in 2016. hedge funds delivered returnsf 1.2% industry wise versus the s&p which has returned 7.6%. that's a massive gap. thank you smouch for that. >> great to see you. quick look at the big moves this morning. cable, that was the really big one on the back of much better expected uk manufacturing pmi. seeing a levelf 1.3251. jump of 9% on the day. a lot of people did think we're going to be in territory of roughly 49. saw the pmi come in at 53.3. also show you what u.s. futures are up to. very early hour this morning. looking pretty positive. s&p 500 seen up roughly 7 points. dow jones at 65. and nasdaq higher by 20 points. u.s. markets were down a tad in
the trading session. both in negative territory for august now. big nonforms port. should be a busy one on friday. back. filly summer is good buy, sadly. >> no more white. >> i believe in breaking the rules sometimes. no white shoes. >> that's it for today's show. orld wide exchange" is coming up next. have a good one.
good morning. data, data and more data. disappointing august. news maker of the morning. eunice yoon sitting down with allibaba chairman. trump doubles down. if you thought the republican presidential hopeful was going to soften on immigration, think again. all the details of the speech yesterday coming up. it's thursday, september 1, 2016. "world wide exchange" begins right now.